Texas lawmakers demand answers from cancer agency

Key lawmakers in Texas demand answers on how faulty grant was approved

Updated 8:03 pm, Friday, November 30, 2012

Much of Texas' political leadership demanded answers from the state's embattled cancer agency Friday, a day after the disclosure it gave a startup biotech company an $11 million grant without proper review.

Key legislators, ranging from those who authored the bill creating the Cancer Prevention and Research Institute of Texas to those who head committees overseeing it, called for an accounting of exactly how the grant awarded to Peloton Therapeutics of Dallas bypassed the legally required process.

"CPRIT cannot succeed in its effort to fight cancer without the public's trust, and right now that trust is in serious jeopardy," Sen. Jane Nelson, R-Flower Mound, and Rep. Jim Keffer, R-Eastland, the authors of the bill that created the agency, wrote in a letter to its top two leaders. "We will continue to look into this matter, search for solutions to prevent such an egregious oversight from occurring in the future, and ensure that the institute is held to the highest possible standards."

The legislators were joined in their criticism by Gov. Rick Perry, House Speaker Joe Straus and the heads of the House committees on appropriations, higher education and public health.

A spokeswoman for Perry said the governor "agrees with Senator Nelson and Representative Keffer that the Legislature and Texas taxpayers deserve to have the full background of this situation."

She added that Perry "expects CPRIT to apply rigorous review standards to every decision that includes taxpayer funds."

Straus said he continues to have "serious concerns about the way some CPRIT grants have been awarded."

The cancer agency disclosed the grant's improper approval on Thursday. At the time it was awarded to Peloton, in June 2010, it was the largest award the taxpayer-funded institute had made, and one of the first four grants provided for "commercialization" to bring cancer drugs to market.

Tumultuous year

The disclosure came after a tumultuous summer in which the agency rescinded a $20 million grant to a team led by the University of Texas M.D. Anderson Cancer Center because of questions about the integrity of its review process. The agency subsequently portrayed the incident as the only time it hadn't followed its procedures.

Jimmy Mansour, chairman of the agency's governing board, or Oversight Committee, said in a statement Friday that the committee was "disappointed to learn about the Peloton grant procedures." He said the committee has asked executive director Bill Gimson to provide a detailed report that "specifically outlines what corrective actions are being taken to ensure this never happens again."

Mansour did not respond to questions about when the report would be completed. The Nelson-Keffer letter called for "an explanation in writing" of how the breach in rules occurred and how the agency proposes to prevent such incidents in the future. It asked for a prompt response.

According to the cancer agency, an internal audit found that its chief commercialization officer at the time, Jerry Cobbs, improperly included the Peloton proposal on a list of awards presented to the Oversight Committee. The grant was approved despite the lack of review.

CPRIT statement

A CPRIT spokeswoman said Friday that Gimson was unaware the Peloton application had not been reviewed when he presented the slate to the Oversight Committee.

The agency halted payments to Peloton, which will resubmit its grant proposal. The company has received $3.2 million so far, the agency said.

Rep. Dan Branch, R-Dallas, the chairman of the House higher education committee, said the latest news "extends and increases my concern in their procedures." He said he's glad about an ongoing state audit, expected to be released in January, looking into whether there are any additional improprieties.

Rep. Lois Kolkhorst, R-Brenham, the chairwoman of the House public health committee, said she doesn't doubt the agency's troubles "have shaken the public's confidence." Kolkhorst called for reform to make sure the mistakes aren't repeated.

Branch and Kolkhorst said they weren't ready to disband the agency, but predicted reform bills would be introduced in the 2013 Legislature to provide greater checks and balances and to try to restore credibility lost in the past year.

Voters overwhelmingly approved the cancer agency in 2007, backing it with $3 billion in bonds. The Legislature wrote the rules of its governance in 2009.

"Mistakes occur at every agency, but CPRIT's mission is too important to be derailed by lapses in the process established by law and by rules to ensure that every dollar allocated goes through a rigorous review process," wrote Nelson and Keffer.